S&P 500 & Nasdaq Analysis and Trends

[3xBuBu]

Just a few thoughts...

Why are insiders at Intel selling off massive amounts of shares at the lows? Based on this, why would you own Intel?

The FED blew it again. They went too far for too long and have not only caused a slowdown but a good possibility of a recession...and I am not kidding. You already know from our many reports that all the movements in the differing sectors had indicated an economic slowdown. Defensive issues leading while growth and consumer issues were blasted. I am now seeing some things that should give everyone pause.

I am hearing too many state that the market has to go up when the Fed pauses. I have news for them. In my studies of the past, when the Fed pauses, the market does poorly until the Fed starts to aggressively lower rates. This FED is not even close. I continue to believe Fed funds rate should be 4.25%...not 5.25%.

The bear market continues. I know you want to hear differently but all evidence up to now indicates nothing but. We have seen the past 3 out of 4 days reverse negatively on volume as the major indices fall off their latest wedges up.

HD and LOW have been blasted and rolling over at the lows. Most other RETAILERS are in the same shape.

FDX and UPS are cracking wide open. These air and ground freight companies are important proxies for the market.

BNI and UNP continue their bear market. The RAILS are losing tracks.

AMR and CAL rolling over badly.

CFC, COF, CIT and ACF all crashing. These are lenders.

BDK, EXP, DE, CAT all on the morphine drip. Tools and machinery going bye-bye.

I am now starting to believe that the BIG FINANCIALS have topped. This is a negative as over 20% of the S&P is interest-rate sensitive.

I am now in the camp that EUROPEAN markets are about to roll over. This is a negative as they have led our markets for quite a while.

I am not even going to get into the major indices charts... that are simply gross. Pay attention to the support levels I gave out yesterday.

A break...and selling will pick up. Dow 11,080...S&P 1262 and NASDAQ 2052.

Longer term, we alert you to these vital levels...that if taken out, you may stick the fork in the market as another leg down...and possibly a nasty leg...will ensue. Start with the Dow at approximately 10,680...a place that has held for quite a while...S&P 1219...NASDAQ 2012...and add in the Russell 2000 at 670.

Kids, this is all the evidence I need. You can't hide bull markets and you cant hide bear markets. If things were fine, these areas would not be blasted like they have been. What I am showing you is reality. Until we see signs of accumulation and follow through, our bearish stance on the condition of this market stands firm.

Gary Kaltbaum

http://biz.yahoo.com/tm/060810/14614.html